The Summit Scene

Over the next week, Pres. Barack Obama will attend three major summits — of the G20 industrial countries, NATO, and the European Union — hold bilateral meetings with the leaders of Russia, China, India, and the main European nations, and visit Turkey for discussions with the leaders of the growing Muslim nation that straddles Europe, Asia, and the Middle East. He does so at a time of immense upheaval, even chaos, in world affairs.

A relatively stable post–Cold War international order dominated by the U.S. is breaking up before our eyes. Its foundations have been undermined by the international financial crisis, by the rise of China and India, by the aggressive ambitions of a nationalist Russia, and by the continuing impact of jihadism on the Muslim world and on Muslim-Western relations. What will the post–post–Cold War order look like? Will it continue to be dominated by the U.S.? And how should Obama seek to shape it?

These issues are interrelated, but each summit deals with different aspects of the overall systemic crisis. The London G20 summit is principally concerned with solving or at least ameliorating the financial crisis and its accompanying economic recession. As almost every commentator has now argued, the U.S. favors an additional fiscal stimulus to lift Western economies out of recession, whereas most Europeans prefer to concentrate on stricter global regulation of financial instruments and capital movements.

Both are wrong. Europe and America have already injected massive demand into their economies. They are close to exhausting their potential for borrowing — a British government debt issue was not fully subscribed last week — and now risk seriously higher inflation down the road. German leaders are right to argue that further deficit spending may actually erode the consumer confidence that we need if people are to start spending again. We should pause to see the effects of earlier injections of demand before piling on more at a time when the U.S. and European economies might be starting to recover. And from a purely American standpoint, if higher U.S. deficits are financed in ways that spur future inflation and a weaker dollar, then Chinese and Russian calls for a new international reserve currency to replace the greenback will gain wider and more serious support.

On the other hand, Pres. Nicolas Sarkozy’s call for a new global financial regulator is nonsense on stilts (which, as it happens, is not a bad description of Sarkozy himself). Previous attempts to build an “international financial architecture” arguably made the current crisis worse. (We would have been better off with different national standards for rating and provisioning against the risks of mortgage-based securities, would we not?) Some national-regulatory failures resulted from the capture of the regulators by the industry they were supposed to be overseeing. But such systemic failures are more likely in global institutions that are remote from public opinion in any one country and, like U.N. institutions generally, exempt from any real democratic accountability. Sarkozy’s passion for them is inspired by his hostility to “les Anglo-Saxons” and their brand of liberal economics, which fosters centers of power independent of the Colbertian state. Though Obama is ideologically sympathetic to tighter regulation, he is unlikely to support a version that would subject Wall Street to controls administered by the U.N. secretariat on behalf of Paris and Frankfurt.

Nothing good can be expected from the G20 summit, therefore. The best we can hope for is that Europe and the United States will each succeed in restraining the other’s pet solution. Fortunately, it has been leaked that a coordinated world stimulus will apparently be postponed to a G20 summit at a later date—we suggest the Greek kalends. And the president should bargain so that any pact on global regulation is sufficiently trivial to ensure a dramatic walkout by Sarkozy, ideally one in which he would trip on the mat.

Recommended Articles

Most Popular

On January 29, tabloid news site TMZ broke the shocking story that Jussie Smollett, a gay black entertainer and progressive activist, had been viciously attacked in Chicago. Two racist white men had fractured his rib, poured bleach on him, and tied a noose around his neck. As they were leaving, they shouted ...
Read More

Modern prophets often say one thing and do another. Worse, they often advocate in the abstract as a way of justifying their doing the opposite in the concrete.
The result is that contemporary culture abounds with the inexplicable — mostly because modern progressivism makes all sorts of race, class, and ...
Read More

This week, the story of the Jussie Smollett hoax gripped the national media. The story, for those who missed it, went something like this: The Empire actor, who is both black and gay, stated that on a freezing January night in Chicago, in the middle of the polar vortex, he went to a local Subway store to buy a ...
Read More

To understand how far left (and how quickly) the Democratic party has moved, let’s cycle back a very short 20 years. If 1998 Bill Clinton ran in the Democratic primary today, he’d be instantaneously labeled a far-right bigot. His support for the Religious Freedom Restoration Act, the Defense of Marriage Act, ...
Read More

In a viral exchange at a congressional hearing last week, the new congresswoman from Minnesota, Ilhan Omar, who is quickly establishing herself as the most reprehensible member of the House Democratic freshman class despite stiff competition, launched into Elliott Abrams. She accused the former Reagan official ...
Read More

You may have missed this news, but Chris Pratt, one of the most likable celebrities in modern American life, is now problematic to some people. But he’s not alone. Justin Bieber, Kylie Jenner, and Selena Gomez are under scrutiny now also. Their crime? They’ve attended Evangelical churches — such as Hillsong ...
Read More

Bernie Sanders, the antique Brooklyn socialist who represents Vermont in the Senate, is not quite ready to retire to his lakeside dacha and so once again is running for the presidential nomination of a party to which he does not belong with an agenda about which he cannot be quite entirely ...
Read More

Jussie Smollett’s phony hate-crime story could have been taken apart in 24 hours, except for one thing: Nobody wanted to be the first to call bullsh**.
Who will bell the cat?
Not the police, and I don’t blame them. Smollett is a vocal critic of President Donald Trump who checks two protected-category ...
Read More